Paper mario seems to work better at "At VI Origin Change" and no framebuffer (default). It *does* flicker, but only once (because it's on change, not update), and it doesn't lag during cutscenes (such as when you first meet merlon or whatever his name is). It still lags when you get your fortune read, but I solve that with frameskip. It also fixes some graphical errors (such as seeing objects through walls for no apparent reason).

RE-edit:

Hrm, with those settings it seems to gimp up 1964 when you choose 'restart'.. it works as soon as you close and open the emulator again though.

EDIT 3:

Damnit. I think "at VI change after screen is drawn" would work.. hrm..

Well, if these two things existed, it'd be awesome.

At VI change after screen is drawn (I honestly can't even remember why I thought this one up XD)
No framebuffer if VI/s drops below 5, otherwise Basic Framebuffer (to prevent lag during cutscenes, and not flicker in menu's/battles)